There’s been a variety of ink spilled on the sale and subsequent acquisition of Indian Motorcycle final month. The model, resurrected by Polaris, is without doubt one of the most iconic American manufacturers round, having begun operations over 100 years in the past. Nevertheless it’s a model that is suffered a variety of turmoil all through its historical past, and I am undecided if that is fairly over with its new personal fairness house owners, Carolwood Capital.
Earlier than I get into why I feel we’re in for a rocky few years, I wish to begin with the truth that there’s been no substantive change from the model as of but. Indian’s new house owners are nonetheless engaged on simply divesting it from Polaris and its interconnected tendrils, all of which is comprehensible. Why begin altering issues once you’re nonetheless making an attempt to determine what goes the place, who does what, and splitting up a enterprise that has a bunch of synergies?
However, lately, Carolwood Capital’s Spencer Towill, who led the acquisition of Indian Motorbike from Polaris, went on Bloomberg and supplied some ideas on the model’s future. And whereas most of his ideas are obscure to the purpose the place nothing substantive is alleged, one particulars supplied up about these future plans is an elevated emphasis on merch, i.e., your t-shirts, your branded gear, and so forth.
That is a playbook that many have criticized both Harley-Davidson and Ferrari for following, as there’s much less emphasis on the precise product lineups in comparison with branded gear. But, whereas Ferrari’s play labored, Harley’s is way extra suspect, and if that is the way in which Indian’s heading, there is a motive to be involved.
“We’re extraordinarily excited to be new stewards of the manufacturers,” begins Towhill, including, “On what we’d do in a different way from Polaris, I’d say proper, now we’re centered on separating the massive quantity of entanglement from the mother or father firm. And I am wanting ahead to telling you extra about our strategic plans in early 2026.” He additionally added that whereas most different personal fairness teams are fascinated by short-term earnings over long-term views, Carolwood operates with far longer methods, which implies in non-investor lingo, they don’t seem to be seeking to flip the enterprise in a yr and a half.
That, no less than, sounds good. And from somebody who’s operated throughout the area, having been employed by a number of PE and VC companies, an extended view means fewer yearly layoffs to “balance the books.” But, whereas Carolwood introduced in an precise motorcyclists to steer the model, within the type of new CEO Mike Kennedy, who used to work for Harley-Davidson, one remark gave me pause, and that was “We positively have plans to develop our attire enterprise within the new yr.”
This might be only a throwaway remark, one instigated by Bloomberg’s Matt Miller, asking a few jacket and eager to really feel a model’s id when he walks into his native Indian dealership. However emphasizing merch over product lineups is one play that a variety of manufacturers have carried out through the years, and one which Indian’s important competitor, Harley-Davidson, has performed to such a level, the Milwaukee model now will get flack for being extra an attire firm than a motorcycling one. Likewise, it actually hasn’t panned out in the identical method that Ferrai’s merch play did, with the Italian’s netting extra revenue from licensing and merch than it does from its automobiles and SUVs. Harley is still struggling financially, and the corporate’s crest is on every thing.
And that must be considerably regarding, as I wouldn’t call Indian’s merch game one in every of its important issues that must be mounted. Somewhat, Indian shares one other Harley-Davidson downside, in that it actually would not have an entry-level bike, one which’s extra reasonably priced to the lots, in addition to approachable to those that do not experience but. Harley is supposedly fixing that, with a $6,000 bike coming within the close to future. However there’s been nothing on the Indian entrance even suggesting one thing alongside these traces from the rumor mill.
Hopefully, Towhill’s feedback had been kind of simply throwaways to Miller’s odd collection of questions, and Kennedy can have extra substantive data quickly, one which higher resembles a roadmap for the enduring model. However till then, what do you all consider the model’s new house owners, their feedback, and the way forward for Indian?
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